Budi insists bailout decision was collective

Former Bank Indonesia (BI) deputy governor Budi Mulya, through his lawyers, insisted on Thursday that his “colleagues” at the central bank should also share the blame on the decision to bailout the ailing Bank Century in 2008.

Alfian C. Sarumaha, one of Budi’s lawyer, said that the decisions to channel short-term assistance (FPJP) to keep Bank Century afloat and to categorize Bank Century as a “potentially failed bank that posed a systemic threat to the banking sector” was a collective decision made by BI.

“The decision was not made by the defendant, but by the BI board of governors in a meeting attended by all board members,” Alfian said, while reading out a defense statement at the Jakarta Corruption Court on Thursday.

Budi has been indicted with collective corruption involving BI officials, including then BI governor Boediono, BI senior deputy governor Miranda Goeltom and BI deputy governor Siti C. Fadjrijah, Budi Rochadi, Hartadi Sarwono and Ardhayadi Mitroatmodjo, as well as then deputy governor Muliaman Hadad, who is currently the chairman of the Financial Services Authority (OJK).

Prosecutors have accused them of making illicit arrangements and orchestrating the eligibility of Bank Century to receive the bailout despite the fraud by its management and shareholders that had left the bank insolvent.

The Corruption Eradication Commission (KPK) also found that the bank should not have been salvaged as it posed no systemic risks to the banking sector if it went under.

Budi also allegedly accepted Rp 1 billion (US$87,000) from former Bank Century owner Robert Tantular in August 2008, around four months before the bailout decision.

However, Alfian said that prosecutors had failed to explain in their indictment that his client had violated any BI regulations, as the FPJP and the decision to categorize bank Century as a failed bank that posed a systemic threat to the banking sector used BI’s internal policies and should be prosecuted under Law No.23/2009 on Bank Indonesia should any irregularities occur.

He cited Article 45 of the BI Law, which stipulated that the BI governor, senior deputy governors, deputy governors and any other officials at the central bank could not be prosecuted on a policy, if the policy met the necessary requirements under the prevailing laws.

Meanwhile, Luhut Pangaribuan, another lawyer representing Budi, said that the disbursement of the FPJP did not cause any state losses, which allegedly reached Rp 7.4 trillion, as reported by the Supreme Audit Agency (BPK).

“Technically, the state did not lose a single penny from the FPJP because the recipient was required to deposit a guarantee that it would return the FPJP money [to BI],” Luhut said.